Improving economic outcomes for smallholders growing teak in agroforestry systems in Indonesia

The ACIAR Project No. FST/2005/177 "Improving economic outcomes for smallholders growing teak in agroforestry systems in Indonesia" has been implemented effectively since March 2007 by the Centre for International Forestry Research (CIFOR) and the collaborative institutions, which consist of the World Agroforestry Centre/International Centre for Research in Agroforestry (ICRAF), Winrock International; International Centre for Applied Finance and Economics Institut Pertanian Bogor (Inter-CAF IPB); Forestry Research and Development Agency (FORDA), the Ministry of Forestry of Indonesia; Farm Forestry Consortium (FFC) or Pokja Hutan Lestari of the district of Gunungkidul and the Australian National University (ANU). The project has three main objectives, i.e. (1) to introduce and adapt silvicultural technologies that improve returns for smallholder teak producers; (2) to identify and design financing schemes providing incentives for smallholder participation in profitable teak production and (3) to enhance market access by smallholder teak producers. The project site was located in the district of Gunungkidul, the province of Yogyakarta at seven selected villages which represent three different geographical areas (northern, middle and southern parts of the district).

During the first year of project period, most of the planned activities have been completed and the project implementation is progressing well. Following up to the inception meeting held in May 2007, a series of discussions among the project team members was conducted to finalize research approaches and methodologies. Integrated questionnaire was constructed for data collection during the household surveys. The household surveys were conducted during August and September 2007, following project launching in July 2007 at the Bupati office in Gunungkidul district. More than 275 farmer respondents were interviewed during the surveys. Exchange visits (study tours) to several places on two occasions in late November and early December 2007 were completed. Places visited included teak processing factories, a private teak plantation (Perum Perhutani), nursery centres and neighbouring teak producing communities. The first study tour was attended by project scientists to review the current teak management practices and identifying possible improvements that could be applied on smallholders' teak production systems. The second study tour was attended by farmer representatives to provide farmers with some experiences and knowledge of best practices of teak plantation management. A one day Focus Group Discussion (FGD) was conducted in December 2007 to cross-check collected data derived from the household surveys as well as farmers' feedback from the study tour. Simultaneously with the household surveys, in depth interviews with relevant key stakeholders at each project site were conducted. An inventory of smallholder teak plantations was conducted in March 2008 to document the existing condition of farmers' teak systems and to cross-check the collected data from the household surveys. In February 2008, a three-day training program for farmer representatives focussed on Verification of Legal Origin (VLO), Wood Tracking System and collective action to develop microfinance institutions was conducted. The first year project activities were summed up at an annual project meeting recently conducted (April 2008) in Yogyakarta.

Under objective 1, survey results have provided detailed documentation of smallholders' current silvicultural practices, attitudes and systems, which confirm many of the pre-project assumptions and provide direction for future actions. Generally smallholder teak producers use poor silvicultural practices leading to low productivity and poor timber quality. Limited knowledge, information and capital have restricted smallholders' application of "best practice" teak farming system. Data analysis from this activity is being progressed and the results are being compiled in a project working report.

Under objective 2, preliminary results show that almost all of the respondents require loan funds to fulfil their daily needs but only a limited portion (12%) of them have used loan funds for productive activities, such as for purchasing fertilizers and farming equipments. Most of the loans are obtained from informal sources, which are very common in each surveyed village. These preliminary findings are being compiled in a project working report.

Activities under objective 3 identified some key marketing problems faced by farmers when dealing with local traders. The problems faced by local traders when dealing with local farmers were also identified.

While scientific publications of project activities are in progress, the project has published one project newsletters in English and in bahasa Indonesia version. (see Annexes 1 and 2). The project also produced 2 articles in ICRAF' published newsletters (see Annex 3 and 4). In early May, the project produced a documentary film on teak farm forestry in the project area including details on project activities supporting its development. Copies of the film on compact disk (CD) will soon be distributed to community organizations and local stakeholders.